Businesses grow up fast inside accelerator
06/16/2014 9:32 PM
06/18/2014 2:32 PM
Haroon Ismail put his business idea first, knowing he would have to face his parents.
“What about medical school? What about the Fulbright?” the conversation went, said the 22-year-old co-founder of AkibaH last week.
He had turned down the prestigious Fulbright scholarship last May, just three months after hitting on his idea for a business. It meant giving up a valuable year of work and study in Malaysia.
Great opportunity, yes.
But, no, he would not take that time away from AkibaH. The company is developing a cellphone case that serves as a blood glucose meter and manages those readings for diabetics and their physicians.
At least Ismail made good use of that year. AkibaH was one of 10 startup companies that completed the three-month Sprint Mobile Health Accelerator program on Thursday.
Team members of the young companies hailed the pace of progress their fledgling firms made in the program. More than one said they had accomplished in three months what easily could have taken two or three years on their own.
“It’s a true acceleration. It just really accelerates your business,” said Andriana Nikolova, the CEO of Yosko, who gave up the last year of her Boston medical residency in March to start the company and move to the Kansas City-based accelerator.
The accelerator, housed in Kansas City’s Crossroads Arts District, is run by Techstars, based in Boulder, Colo. Techstars is a big name in accelerators, running a dozen globally and often working with a corporate partner such as Sprint.
Sprint’s mobile health accelerator culminated Thursday evening when the 10 CEOs pitched their businesses to more than 50 potential investors. It was a high-energy event, with each CEO getting 5 minutes on stage at the Muriel Kauffman Theatre inside the Kauffman Center for the Performing Arts.
Investors weren’t the only ones among the roughly 1,200 who attended. And the 10 businesses weren’t the only ones to benefit from the accelerator.
“I’m interested in how these companies will elevate the discussion of mobile health technology, not just locally but nationally,” said Chris Cardinal, who attended the demo day though he wasn’t scouting an investment.
Cardinal co-founded Welltodo LLC in Kansas City. The company’s app helps predict migraine headaches and alerts its user when preventive steps could help.
Welltodo is only 8 months old, launching about the same time the Sprint accelerator was accepting applications. Cardinal said that before the accelerator he often had to explain the idea behind mobile health technology.
“Now that Techstars is here, people know,” he said. “There’s a nuanced understanding.”
Inside the accelerator, time essentially is compressed.
For Australia-based Ollo Mobile, the accelerator connected its team with valuable mentors and industry contacts. Telecommunications equipment suppliers, manufacturers and lawyers all keyed on high-value consumers products.
“It would have taken probably around three years to even get access to these people,” Ken Macken, Ollo’s chief technology officer said. “It made a huge difference in our business and all the businesses here.”
One result was a test program through the University of Missouri-Kansas City in which five octogenarians are using the wearable cellphone. Most had never used a traditional cellphone.
Ollo’s device fits around the wearer’s neck and is activated by voice commands. The idea is that it’s always available to reach emergency responders. But it’s still a cellphone for calling family and friends.
Symptom.ly worked recently with a mentor from Hallmark Cards on a survey that helped change its technical focus, said Cade Lubeck, the startup’s chief of staff. The company has an asthma tracker app and sees families covered by Medicaid as highly likely to benefit from using it.
The survey was conducted just three weeks ago. Lubeck said it showed that 80 percent of the cellphones in low-income families use the Android operating system. So Symptom.ly shifted its resources to developing the app for Android phones instead of Apple’s iPhones that have their own operating system.
Team to team
Collaboration also helped fast-track the startup experience.
Giacomo Listi, chief information officer for the personal security app Lifeline Response, said the previously self-funded “bootstrap” operation made two years’ worth of progress in distribution, sales and marketing during the three-month accelerator.
Many advances came through interplay among the teams. He said ideas that normally could take six months or even a year to hash out were resolved in a week.
It also helped, Listi said, that teams would share their mistakes and successes in dealing with the problems they had encountered and were common to most startups.
Ollo’s Ben Howard, who heads business development, said the wearable cellphone company ran design ideas by other teams who told “us when we’re on the money or not.”
And teams collaborated knowing that once demo day came, the investors would be comparing the companies as investment opportunities.
“There’s a bit of competition, but it’s not a competition,” said Macken with Ollo.
At least some of the companies see benefits from working together even now that the accelerator program has ended.
For example, Prime is developing an app that gives consumers access to their own medical records.
“Your doctors have your health information. Your insurance company has your health information. But you generally don’t have your health information,” said Will Imholte, Prime’s chief of product design.
It would mesh nicely with Medicast. Its app delivers a house-call doctor within two hours of a user’s request.
“This is ongoing,” said Owen Imholte of Prime. “It’s all good friendships that have been built.”
Demos and deals
Preparing for Thursday’s demo day included practicing the pitch in front of other teams. The audience would prod — why pitch it that way instead of this way?
Those 5 minutes were high stress moments. The CEOs wanted to pack them with a lot of information, but they wanted to remain cool and conversational.
“The first minute is key,” said David Brown, a managing partner of Techstars, adding that an unimpressed investor’s attention strays easily. “People get out their cellphones and start checking their email.”
Derek Bereit, co-founder of Symptom.ly, came out swinging about the company’s asthma tracking app.
“Our first product keeps kids out of the hospital,” he said at the start of his presentation.
All the efforts paid off as each of the CEOs drew a crowd of investors after the event, said Keith Harrington, who was in that crowd for the Kansas Bioscience Authority.
Harrington had met each of the companies’ teams three months ago and mentored a few as part of the program. All of them made “unbelievable progress,” for example, in their businesses’ focus and strategies for making money, he said.
Investor backing was the most hoped-for payoff Thursday, though no one was announcing deals immediately or even how much money they were asking for.
For many, the range probably was between $500,000 and $1.5 million, though a few seemed far enough along to Harrington that they could attract venture capital backing of perhaps $3 million or even $5 million.
“Part of the growth of the company is attracting investors,” said Yosko’s CEO Nicolova. “That will be a very essential part of the next two months for us.”
Those talks have started.
To reach Mark Davis, call 816-234-4372 or send email to firstname.lastname@example.org.
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